Tyson Foods, Inc. · NYSE:TSN
Tyson Foods — Q3 2023 Earnings Presentation
22 slides from Tyson Foods's earnings presentation, Aug 7, 2023
Slide 1: 3Q Fiscal 2023 Supplemental Information
— 3Q Fiscal 2023 Supplemental Information August 7, 2023
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Certain information in this presentation constitutes forward-looking statements as contemplated by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, current views and estimates of our outlook for fiscal 2023, other future economic
Slide 3: 3Q23 Key Messages
3Q23 Key Messages 1 Sequential improvement in overall results from Q2 to Q3 2 Challenging macro environment – focused on what we can control 3 Operational execution is delivering tangible results 4 Further optimizing our footprint to improve performance Our 1| Win with team 2| Win with customers 3|
Slide 4: Segment Performance Overview
Segment Performance Overview Chicken Beef • Significant sequential AOI1 improvement of • Focused on disciplined approach $100M+ to matching supply with customer demand • Further optimizing our cost structure • Cattle costs increasing faster than cutout values compared to last year Prepared Foods Por
Slide 5: Retail volume and share growth fueled by brand strength
Retail volume and share growth fueled by brand strength Latest 13 Weeks Volume Tyson Core Business Lines Brand Strength Relative to Sales % Change Pound Share Competition vs. YAG Pound Share and Pt. Chg. vs. YAG % Favorite Brand Among Category Buyers Total Tyson Core Bus. Lines Q3 Q3 Frozen Nuggets
Slide 6: Omni-channel innovation as key growth enabler
Omni-channel innovation as key growth enabler Jimmy Dean Toaster Pop Ups Tyson Original Chicken Hillshire Farm Sandwich Smoked Ham Tyson Foodservice Snack Kit Chicken Sandwiches Hillshire Farm Jalapeno Cheddar Jimmy Dean Maple Smoked Sausage Griddle Cakes Tyson Original Chicken Jimmy Dean Biscuit Hi
Slide 7: Sales, AOI and EPS performance
Sales, AOI and EPS performance Third Quarter 2023 vs Third Quarter 2022 SALES ADJUSTED OPERATING INCOME1 ADJUSTED EPS1 (in millions of dollars) (in millions of dollars) (in dollars per share) $13,495 $998 $2 $13,140 -$364 $1.94 -$487 $0.15 $30 $179 $(0.04) 3Q22 3Q23 Q3 2022 AOI Net Volume Sales COGS
Slide 8: Disciplined operations and seasonal improvement in Beef
Disciplined operations and seasonal improvement in Beef Third Quarter and YTD23 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) $14,995 $14,296 o 3Q23 sales flat with lower volume offset by increased pricing $2,100 o As expected, 3Q
Slide 9: Pork industry fundamentals remain challenging
Pork industry fundamentals remain challenging Third Quarter and YTD23 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) $248 o 3Q23 sales decreased primarily due to lower $4,810 pricing $4,274 o 3Q23 operating income decreased due to
Slide 10: Improving trajectory in Chicken
Improving trajectory in Chicken Third Quarter and YTD23 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o 3Q23 modest sales volume increase; sequentially $12,905 $12,342 volume decreased due to initiatives to lower inventory $589 in
Slide 11: Retail Brands continue to drive strong performance in Prepared Foods
Retail Brands continue to drive strong performance in Prepared Foods Third Quarter and YTD23 vs Comparable Periods SALES ADJUSTED OPERATING INCOME1 HIGHLIGHTS (in millions of dollars) (in millions of dollars) o 3Q23 sales volume decreased due to softness in $7,173 $7,343 foodservice, partially offse
Slide 12: Deploying capital for long term profitable growth while maintaining a strong balance sheet
Deploying capital for long term profitable growth while maintaining a strong balance sheet Leverage Ratio OPERATING CASH FLOW BUILD (Net Debt/Adj. EBITDA)1 (in billions of dollars) 3.2x FINANCIAL <2.0x STRENGTH $1.89 Manage our leverage ratio to be at or below our long-term target 3Q23 Target Capita
Slide 13: Revised guidance
Revised guidance FY2023 Guidance2 YTD22 YTD23 Prior Indication Revised Indication Sales $39.5 billion $39.5 billion $53 – $54 billion No change Sales Growth % 15.5% 0% 0 – 1% growth ~Flat Chicken AOI Margin1 4.8% (1.2)% (1) – 1% No change 8.9% 10.1% 8 – 10% No change Prepared Foods AOI Margin1 Beef
Slide 14: Q&A
Q&A Donnie King John R. Tyson Brady Stewart Stewart Glendinning Wes Morris Amy Tu President & CEO CFO Group President, Group President, Group President, President International & Fresh Meats Prepared Foods Poultry Chief Administrative Officer
Slide 15: Appendix
Appendix
Slide 16: Segment Sales Channel Bridge Quarterly YoY
Segment Sales Channel Bridge Quarterly YoY Third Quarter 2023 $ millions Channel Highlights • Retail increased $29M with $13,495 -$64 increases in Beef of $183M offset by decreases in Pork of $72M, -$154 Chicken of $66M, and Prepared Foods of $16M -$3 -$295 • Foodservice decreased $23M with decrease
Slide 17: Volume Performance – Foodservice
Volume Performance – Foodservice Outpacing foodservice broadline industry recovery, while maintaining share in our Focus 6 categories and continuing to post share gains relative to pre-pandemic (+2.1 pts) Latest 13 Weeks Volume Sales % Change vs. YAG vs. 4YAG 9.4% 4.2% 4.2% 3.3% 2.8% Share Share 0.0
Slide 18: EPS Reconciliations
EPS Reconciliations $ in millions, except per share data (Unaudited) Third Quarter Nine Months Ended Pretax Impact EPS Impact Pretax Impact EPS Impact 2023 2022 2023 2022 2023 2022 2023 2022 Reported net income (loss) per share attributable to Tyson (GAAP EPS) $ (1.18) $ 2.07 $ (0.56) $ 7.42 5 Less:
Slide 19: EBITDA Reconciliations
EBITDA Reconciliations $ in millions, except per share data (Unaudited) Nine Months Ended Fiscal Year Ended Twelve Months Ended July 1, 2023 July 2, 2022 October 1, 2022 July 1, 2023 Net income (loss) $ (206) $ 2,712 $ 3,249 $ 331 Less: Interest income (22) (10) (17) (29) Add: Interest expense 262 2
Slide 20: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (Loss) (for the third quarter ended July 1, 2023) International/ Beef Pork Chicken Prepared Foods Total Other Reported operating income (loss) $ 66 $ (74) $ (314) $ 206 $ (234) $ (350) Less: Producti
Slide 21: Chicken Segment Sequential Operating Income (Loss) Reconciliation
Chicken Segment Sequential Operating Income (Loss) Reconciliation $ in millions (Unaudited) Three Months Ended July 1, 2023 April 1, 2023 Change Reported operating income (loss) $ (314) $ (258) $ (56) GAAP ROS % (7.5)% (5.8)% (1.7)% 5 Less: Production facilities fire insurance proceeds, net of costs
Slide 22: Segment Operating Income Reconciliations
Segment Operating Income Reconciliations $ in millions (Unaudited) Adjusted Segment Operating Income (Loss) (for the nine months ended July 1, 2023) International/ Beef Pork Chicken Prepared Foods Total Other Reported operating income (loss) $ 232 $ (128) $ (503) $ 705 $ (238) $ 68 Less: Production